The Raghuram Rajan panel report has made a case for ending the ‘special category’ criteria for providing additional assistance to poorer States, as it ranked Goa and Kerala as the economically most advanced States and Odisha and Bihar the least.
The committee, headed by the then chief economic advisor Raghuram Rajan (now RBI Governor) was set up by the government amid demand for “special category” status by Bihar. It has suggested a new methodology for devolving funds on States based on a ‘multi dimensional index (MDI)’.
The committee has suggested that the 28 States be split into three categories—least developed, less developed and relatively developed—depending upon their MDI scores. As regards the allocation of funds, the report has suggested that each State should get a basic fixed allocation and an additional allocation depending on its development needs and development performance.
According to the committee, these two recommendations, along with the allocation methodology, will effectively subsume what is now “special category” status.
Based on the MDI scores, the 10 least developed Atates are Odisha, Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal Pradesh, Assam, Meghalaya, Uttar Pradesh and Rajasthan.
The seven most developed States are Goa, Kerala, Tamil Nadu, Punjab, Maharashtra, Uttrakhand and Haryana.
The committee, headed by the then chief economic advisor Raghuram Rajan (now RBI Governor) was set up by the government amid demand for “special category” status by Bihar. It has suggested a new methodology for devolving funds on States based on a ‘multi dimensional index (MDI)’.
The committee has suggested that the 28 States be split into three categories—least developed, less developed and relatively developed—depending upon their MDI scores. As regards the allocation of funds, the report has suggested that each State should get a basic fixed allocation and an additional allocation depending on its development needs and development performance.
According to the committee, these two recommendations, along with the allocation methodology, will effectively subsume what is now “special category” status.
Based on the MDI scores, the 10 least developed Atates are Odisha, Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal Pradesh, Assam, Meghalaya, Uttar Pradesh and Rajasthan.
The seven most developed States are Goa, Kerala, Tamil Nadu, Punjab, Maharashtra, Uttrakhand and Haryana.
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